UNFCU to be first issuer in the US to offer credit cards with a high security chip

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UNFCU to be first issuer in the US to offer credit cards with a high security chip

UNFCU is implementing a new program for credit cards that will offer a personal identification number (PIN), as well as a microprocessor-based chip, which will provide added security. All UNFCU Platinum Cardholders will receive the Europay-MasterCard-VISA® (EMV) chip and PIN cards, which will be called the VISA Elite Credit Card. Other UNFCU cardholders will have the option to upgrade.*

Having recognized that more than 60% of its members reside outside of the United States and regularly leave the US for deployments in other countries, UNFCU has become a pioneer among US financial institutions by developing a convenient and secure payment option that members can use anytime, anywhere they travel.

Additionally, news of its alliance with Gemalto, a security leader which will manufacture the EMV chip cards, appeared around the world. Stories were published in newspapers/online magazines from the American Banker to Le Figaro in France, and blogs, podcasts, and Tweets also heralded the news. Card Services Manager Merrill Halpern appeared on Fox Business News live at its New York studios last spring upon invitation.

Following are excerpts from a Q&A with Merrill Halpern that was posted on CreditCards.com.

Q. Why has UNFCU decided to create a chip and PIN card?
Halpern: We are in business to serve members and the new EMV card is a testament to UNFCU’s ability to meet its members’ needs. Indeed, “Serving the People Who Serve the World,” is UNFCU’s mission statement. UNFCU saw a need to deliver a more convenient and secure payment option that our members can use anytime, anywhere they live or travel.

Q. How does the microprocessor chip work?
Halpern: The new technology authenticates the data being transmitted from the chip.This makes it much more difficult to counterfeit than the magnetic stripe. The EMV card provides what is known as a dynamic data authorization and is globally compliant to work wherever credit cards are accepted.

Q. What will the benefits be for members?
Halpern: The new EMV card provides greater payment card acceptance globally for members, who are perhaps some of the most mobile in the world. Issuing these members a chip and PIN card is therefore a tremendous benefit. Many members had started to experience difficulties with their magnetic stripe-only cards when working or living outside of the US. We wanted to solve problems our international members were experiencing, having to use traditional cards in areas of the world where chip cards are the norm, such as a payment machines in parking lots, train stations, or bike rental kiosks someplace outside of the US.

While important for the global traveler, the new EMV card also brings a higher level of payment security to the domestic cardholder, which extends beyond magnetic-stripe technology. The EMV-based payment card can be likened to an ‘insurance certificate’ for cardholders because the combination of chip and PIN enhances security. Visa travel cancellation insurance combined with chip/PIN and LOUNGE CLUB™ make this the ultimate choice in credit cards for world travellers.

Q. Can UNFCU’s new EMV cards be used as traditional magnetic stripe cards until chip and PIN readers become available?
Halpern: Yes. Additionally, the program will ensure current global acceptance and compatibility for both in-store and online payment transactions.

Q. Do you think chip and PIN will become the norm in the US?
Halpern: Yes. It will enable financial institutions to reduce losses due to fraud, particularly in North America – the only area still using magnetic stripe technology. Incidence of fraud is 30% lower in Europe, as a result of the microcomputer-based technology. This is why UNFCU advocates a complete roll-out of chip and PIN throughout the US. Indications are that certain very large chain merchants in the US, such as Wal-Mart, are making plans to implement chip and PIN readers. When these inklings come to fruition, they will help add momentum to the overall effort to get more issuers to provide these types of cards.

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*Subject to eligibility requirements.